Ashapura Intimates Fashion IPO (Ashapura Fashion IPO) – Neutral

Latest Initial Public Offerings (IPO)Ashapura Intimates Fashion IPO (Ashapura Fashion IPO) – Neutral

Mumbai based, Ashapura Intimates Fashion Ltd is coming up for public issue for Rs 21 Crores at a price Rs 40 (Rs 10 face value with a premium of Rs 30 per share). Ashapura Intimates revenue grown by 100% in last financial year, profits grown by 144% growth, good, but what are the hidden factors? Should we subscribe to Ashapura Intimates IPO?

About Ashapura Intimates Fashion Ltd

Ashapura Intimates is in the business of designing, branding, marketing and retailing intimate garments such as loungewear, bridal nightwear, honeymoon sets, bathrobes, nightwear and maternity feeding nightwear are marketed under the brand ‘Night & Day’. In the last couple of years, the company has expanded its product portfolio by diversifying into the marketing and distribution of other intimate garments such as sportswear, women’s innerwear and lingerie under the brands ‘Valentine Sportswear’, ‘Valentine Secret Skin’ and ‘Valentine Pink’ respectively. The company has good presence in the Middle East and North Africa too.

The company's distribution network consists of 75 distributors, including an overseas distributor, C&F agents and various MBOs such as Vijay Store, Big Life by JDS Apparels, Chunmun by Chunmun Stores, La Lingerie by S&D Fashions, etc. that operate in various regions of India. Besides these MBOs, it also retails through its online platform and various e-commerce websites such as and

Issue details:

  • IPO opens: 28-Mar-2013
  • IPO closes: 4-Apr-2013
  • Price: Rs 40 per share (Face value of Rs 10 with a premium of Rs 30 per share)
  • Minimum bid: 3,000 shares and in multiples of 3,000 shares thereon.
  • Minimum investment: Rs 120,000
  • Leader managers: KJMC Corporate Advisors India Ltd
  • Registrar: Link Intime India Private Limited
  • Listing: BSE SME
  • Prospectus:

CARE research has assigned Ashapura Intimates fundamental grade as 4/5 which indicates as very good fundamentals which is a plus point.

Purpose of the IPO:

To set up 10 EBOs, fund branding and marketing set-up, invest in the equity shares of its group company Momai Apparels, fund modernisation of its machinery and meet incremental working capital requirements

Company financials

Company revenues have grown from Rs 354 lakhs (FY 2007-08) to Rs 10182 lakhs (FY 2011-12). Revenue has grown 100% in FY 2011-12 compared to previous financial year (FY 2010-11).

Profits have grown from Rs 7.74 Lakhs (FY 2007-08) to Rs 341.43 Lakhs (FY 2011-12). The profit margin is 3.35% in FY 2011-12.

Ashapura Intimates Fashion IPO (Ashapura IPO)


  • Company is having good revenue story in the last 5 financial years.
  • CARE research has assigned “SME fundamental grade as 4/5” (very good fundamentals).
  • Post the issue, on a profit of Rs 3.41 Crores for the FY11-12, the EPS would be Rs 1.75. With the ask price of Rs 40, The P/E ratio translates to Rs 23x. The peers like Lovable Lingera, Page industries, Rupa and Co are quoting at P/E ratio of 21x, 41x, 30x, hence the price is fairly valued. Also it is indicated in prospectus about P/E for Raymond (High) which is Rs 38 and for Wires and Fabrics (S.A.) Ltd (Lowest) as Rs 3.60 and average is Rs 34.48, which indicates that this issue is not highly priced.


  • If we annualize the current year revenues, the growth in revenue for this year (FY 2012-13) would be 13% only compared to previous financial year (FY 2011-12).
  • Ashapura Intimates sell products in highly competitive markets and there is pressure on the margins. Currently the margins are around 3%.
  • Exports are expected to be decreased by 15% (annualized) in the current financial year (FY2012-13) compared to previous financial year.
  • The minimum investment is Rs 120,000. Small investors cannot afford to invest such big amount for a SME IPO.

Recommendation / Investment strategy: Though there is good revenue growth story in the last 5 financial years, it has slow down in current financial year. Margins are low due to stiff competition. Though, CARE research has given SME fundamental grade of 4/5 to this company, considering all these factors, we would be “neutral” on this IPO.  

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Ashapura Intimates Fashion IPO

Suresh KP

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